4 Tips to Raise the Performance Bar in Your Business

You’ve most likely heard that the majority of the modern workforce is disengaged: Gallup reports that only a meager 13 percent of the workforce is engaged. There is a very good chance, then, that disengagement is currently harming your business and leading to suboptimal performance. Given this fact, it would seem that addressing engagement issues could be a key to boosting your business’s performance.

There is a lot of truth in the prior paragraph, but it’s not the full picture: improving engagement levels may only lead to increased performance within a specific cohort of your business while performance levels remain stagnant in other areas. According to Leadership IQ, in 42 percent of organizations, low performers are actually more engaged than high performers.

What’s happening here is that an ineffective performance management system is in play, meaning that lower performers are allowed to happily coast along in blissful ignorance. They are clearing away the deck chairs while the boat sinks, so to speak. These deluded poor performers are never penalized, and they remain engaged in their jobs as a result. On the other hand, high performers are carrying the load — bailing water out of the sinking ship — and when they are not recognized for their efforts and contributions, they become disengaged.

While engagement-boosting strategies could lead to even better performances and higher retention rates in your high-performing, but disengaged, cohort of workers, these strategies will not encourage performance improvements among the low performers, who actually need to improve. These people are already happy and engaged, after all. Engagement-boosting strategies also won’t encourage low performers to leave the business, meaning this cohort will continue to be a drag on organizational performance.

All of this suggests that organizations need very specific strategies to deal with the self-deluded cohort of happy low-performers. And so, I offer several tips on how to raise the performance bar in your business.

1. Stretch Assignments

For far too long, low-performing staff members have been allowed to coast along, working well within their comfort zones. Stretch assignments can be great ways to shake things up among the engaged and overly comfortable cohort at the bottom of your business.

Stretch assignments can be specific projects or initiatives that push the individual(s) involved well outside of their comfort zone(s). Stretch assignments force people to adapt to new situations, learn new skills, and improve their existing abilities. This “shape up or ship out” approach should leave you with:

higher performing workers who make bigger contributions than they did in the past,

or frustrated workers who have realized the gravy train is over.

Either result is beneficial: obviously, the newly high-performing workers are a boon to the organization, but the frustrated workers bring their own blessings: as they leave, they pave the way for you to hire fresh, new, and engaged talent.

2. If Your Employee Recognition Program Rewards Failure and Penalizes Success, Correct It

The Leadership IQ study mentioned above found that employee recognition programs in organizations with “engaged underperformers” were actually rewarding failure. Lower performers were much more likely to say that they were praised for their accomplishments than higher performers, which means that low performance was positively reinforced and high performance was not.

The reasons for this topsy-turvy situation is that most employee recognition programs are skill-based, rather than performance-based. This enables poor performers to pass through the system unchecked. The researchers suggest that employee recognition programs be made to place greater emphasis on performance.

3. Forge a Strong Link Between Performance and Pay

Take some time to understand the behaviors that promote success in your organization, and then develop key performance indicators (KPIs), goals, and targets for all the employees within your business based on these behaviors. After that, you can link all raises and bonuses to the meeting of these KPIs — that is, you can start to pay employees based on performance.

Low-performing staff will start to suffer economically as their pay falls behind the market standard, incentivizing them to either improve or leave. On the other hand, high-performing staff will see their superior performance reflected in their compensation, which should increase both engagement and performance.

4. Assess and Reward Staff More Frequently

Research from Bersin by Deloitte suggests that employers who set performance goals quarterly generate 31 percent greater returns their goals than firms who set goals annually. It seems that companies can achieve better results when assessments and rewards are given more frequently.

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Kazim Ladimeji is a Chartered Member of the Chartered Institute of Personnel and Development, and has been a practicing HR professional for 14 years. Kazim is the Director of The Career Cafe: a resource for start-ups, small business and job seekers.